Correlation Between Dexus Property and Scentre

Can any of the company-specific risk be diversified away by investing in both Dexus Property and Scentre at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dexus Property and Scentre into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dexus Property Group and Scentre Group, you can compare the effects of market volatilities on Dexus Property and Scentre and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dexus Property with a short position of Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Property and Scentre.

Diversification Opportunities for Dexus Property and Scentre

0.54

Correlation Coefficient

Dexus Property  Scentre

Very weak diversification

The 3 months correlation between Dexus and Scentre is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Property Group and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre Group and Dexus Property is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dexus Property Group are associated (or correlated) with Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Dexus Property i.e., Dexus Property and Scentre go up and down completely randomly.

Pair Corralation between Dexus Property and Scentre

Assuming the 90 days trading horizon Dexus Property Group is expected to under-perform the Scentre. In addition to that, Dexus Property is 1.08 times more volatile than Scentre Group. It trades about -0.11 of its total potential returns per unit of risk. Scentre Group is currently generating about -0.03 per unit of volatility. If you would invest  350.00  in Scentre Group on September 16, 2024 and sell it today you would lose (3.00) from holding Scentre Group or give up 0.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Dexus Property Group  vs.  Scentre Group

Dexus Property Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dexus Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Scentre Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scentre Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Scentre is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dexus Property and Scentre

The main advantage of trading using opposite Dexus Property and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Property position performs unexpectedly, Scentre can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Scentre will offset losses from the drop in Scentre's long position.

The idea behind Dexus Property Group and Scentre Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.